I believe in being diversified. One third in stocks, one third in bonds and one third in cash is a conservative mix. I just checked my Vanguard index funds. For the past 10 years, the average annual returns are 8.49 percent for S&P 500 stocks, 3.95 percent for intermediate term bonds, and 0.5 percent for the money market. The problem with trying to time the market is that most people cannot do it accurately, and sometimes they fail with horrible results. Back in the 70's, I thought interest rates were high at 8 percent until they went to 16 percent.
|